Real Estate Curve

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Archive for the ‘Seller’ Category


Canadian Real Estate Curve Update February 2009

Newest report on the Canadian Real estate curve affecting buyers and sellers, RRSP new restrictions for first time buyers, consumer confidence and more.

Posted under Buyer, First Time Buyers, News, Seller

Us Real Estate Curve January 2009 Video

Another great short video talking about lower interest rates, who should buy and why to sell in the US.

Posted under Buyer, First Time Buyers, News, Seller, Videos

Canadian Real Estate Curve Report January 2009 Video

Great short video on the Canadian Real Estate Curve Impact, talks about some provinces decreasing and some even increasing in sale and value. This report is for the month of January 2009, great short informational video.

Posted under Buyer, First Time Buyers, News, Seller

Real Estate Curve, A True Roller Coaster

The following video dementrated the real estate curve prices (+/- ) in several decades. It shows exactly when the prices and economy was up and when it was down. This is a great short video make sure you  check it out for all buyers, sellers and specially first time buyers.

Posted under Buyer, First Time Buyers, News, Seller

Home Staging, It Can Help To Sell Your Home Fast

Home staging is one of the more effective ways you can attract more buyers to you home. While having your home staged it can bring a lot of interest of potential buyers even looking online at the photos of your home. Some people don’t realize this but a lot of buyers get discouraged when looking at photos of homes with junk laying around and don’t even bother looking at those homes. Don’t be one of those people look at the video below of how a home should be staged. Hope this help a bit.

Posted under Seller, Videos

Selling Tips During Winter – Real Estate Curve

A few must steps in order to have your home showcased properly and effectively in winter time especially in the GTA with the current weather we are getting now.

  • Shovel your drive way and steps (you don’t want the buyers falling and suing you)
  • Put salt around the walking perimeter around the house and the sidewalk(if you have one on your side)
  • Put the room temperature to a pleasant degree
  • Put on some soft music to once entered it can feel right
  • Always leave some lights on if a showing is around 5:00pm or later, you don’t want people looking and tripping while looking for a light switch

  • Clear all junk that isn’t needed in the house specially the kitchen 

  • Try not to be present during the showingFollowing these step won’t sell your home right away but they will help in the decision making process of the buyers. The less stress the buyers has the better the outcome will be. With the curve down in real estate your house must be top notch for the buyers to consider it.
Posted under News, Seller

Determining Your Home Value, Listen To Your Agent Not Your Neighbour, It May Save You Time & A Headache

When considering to sell your home remember than a agent has the latest tools and skills to determine how much your home is really worth. Your neighbor may tell you that he or she sold the same house on the street 3 months ago for x amount of dollars more but may not know what is actually happening with the current economy and latest buyers trends. Determining the value of a house is a tricky process, many factors must be considered. For example the time of the year, hot or cold market, buyers trends, economic health, job loses, house upgrades/updates, quality of work done to home, the current condition compared to recent sold (and not compared to currently listed properties). There is a lot more factors to consider, is it a corner house, or is there a school near by etc…There is a whole lot of other to consider. Contact a local agent to find what your home is actually worth in today market.

Posted under Seller

Price Drops In Housing? Not All Homes or Condos…Only Some…The Ones That Have Too

I am an agent working in the GTA area, based on what I see not all homes are priced or sell accordingly to the market right now(January 2009). People do get good deals with $40,000 – $60,000 lower purchase prices but only from the vendors that really have to sell.

There is alot of people still selling their homes way above the market value, their frame of mind is that if they don’t sell for what price they want to won’t sell at all. Some people made the mistake of buying first and then selling their home, at this time of the market if you buy something and your house isn’t selling, then you will have to reduce the price until you get it sold. This is not a typical way it should be but if you are stuck with 2 properties a price reduction is the only way. As I say to alot of people if something is priced right it will sell.

Posted under Buyer, First Time Buyers, Seller

First 2 Weeks In The GTA Real Estate Curve For 2009 Stats

Based on some stats from the Greater Toronto Area, real estate activity has hit a curve downward. Basted on the very first 2 weeks of January 2009 sales went down 50% as compared to the first 2 weeks of 2008.

What does this mean for all of is that buyers are affraid to invest their hard earned money. Buyers are affraid to lose property value if the housing market will take a further curve in sales activity. As buyers you want the price to fall, as a seller that owned real estate for a years and made money with equity they want the market to go back up.

What will happen we shall see.

Posted under Buyer, First Time Buyers, Seller


Occasionally, one can see “For Sale By Owner” signs, and some owners think that selling their own home will not only save them money, but believe they have an advantage over the sellers that have their home listed by a reputable Realtor©. Before you decide to take on this very important and legally complicated process…remember not even most Real Estate Lawyer’s recommend selling your own home yourself in today’s market. Here are a few of the reasons why:

1. You are limiting your exposure to potential buyers (less than 10% of what a good real estate broker will generate) which theoretically means your home will take ten to fifteen times longer to sell on the market.

2. The longer a home is on the market the lower the selling price is. Why? Because most buyers think that if the home has not sold after this long… there must be something wrong with the home.

3. The selling/buying process begins AFTER the buyer leaves your home. Most sellers think that all it takes is for someone to see their home, fall in love with the great decor… and the offer automatically will follow. Remember that the buying process begins after they leave your home. If a real estate sales representative does not represent the buyer, and they are looking on their own…they usually leave the home and start to talk themselves out of the buying process. If the buyer is represented by a real estate professional Realtors© are trained on how to overcome buyers remorse–a very common occurrence.

4. Because of the limited exposure you will very likely end up with a lower selling price. Remember, in order to generate the highest price possible for your home… selling means exposure. You need the maximum exposure possible, to generate the highest price possible.

5. Most buyers find it extremely awkward to negotiate or even to talk directly with sellers and therefore avoid FSBO properties.

6. Lack of negotiating experience and lack of pertinent information often will result in a lower selling price, or worse yet, a bungled contract and possible lawsuits.

7. The majority of qualified buyers are working with experienced real estate professionals.

8. Many serious buyers will pass by a FSBO home merely because they recognize that it is not in the real estate mainstream, this can some times make them wary.

9. As most local buyers now retain an experienced real estate sales person to represent them as their buyer-agency, you will probably be negotiating against an experienced professional.

10. Expected savings in broker’s fees will also be greatly reduced if you offer a selling commission to entice real estate sales representatives to bring potential buyers.

11. If you are planning to use a Lawyer to help you negotiate the offer, then your lawyer’s fees will be considerably higher.

12. Only real estate sales representatives have access to the up-to-date market information. News reports cannot approach the timeliness or specificity available to real estate sales people. Further, real estate sales representatives are involved in home sales much more frequently than the average homeowner is. This familiarity leads to a degree of expertise that provides an edge on negotiating and successful selling.

13. You only pay the commission to the real estate broker, if they successfully sell your home at the price you are happy with.

14. Accepting an offer is one thing, ensuring a safe and successful closing is quite another. Real estate transactions usually always have problems on closing. At times, expecting the Buyers and Sellers Lawyer’s to fight it out or resolve the problems, can sometimes mean the deal is lost. This is the time that your experienced real estate professional, can be the most important. Your Realtor© can act as a great mediator. Lawyers MUST act only on their client’s instructions and are not paid to negotiate.

Posted under News, Seller

The Home-Staging Cheat Sheet

6 easy ways to make your property more appealing to buyers

By Luke Mullins

Faced with a massive glut of unsold homes, many would-be sellers are struggling to make their properties stand out in today’s downtrodden real estate market. But while the economic head winds are beyond property owners’ control, author Barb Schwarz says they can dramatically improve their chances of making a sale by devoting attention to an often-overlooked corner of real estate marketing: home staging.

Living room in a dollhouse.

(Look Photography/Beateworks/Corbis /Jupiterimages)

Get them inside. The first thing a prospective buyer notices about a home is not the living room but the front yard. “A lot of people think staging is the inside only,” Schwarz says. “[But] we’ve got to stage the outside to get them inside.” So cut the grass, trim the hedges, rake those leaves, sweep the sidewalks, and power-wash the driveway. And make sure you don’t have too many potted plants scattered around the property. “Nothing dead,” Schwarz says. “You’d be amazed how many people have dead plants in their yards.”

Pretend youre camping. Schwarz says a cluttered room will appear too small to buyers. “Clutter eats equity,” she says. Schwarz tells homeowners to go through each room of the house and divide their belongings into two piles: “keep” and “give up.” Items in the “keep” pile will be used to stage the room, while those in the “give up” pile should be stored elsewhere. “Pretend you are camping,” she says. “When you go camping, you are not taking all those books, right?”

The decluttered rooms may appear bare to the seller, but the buyer won’t think so. “We are not selling your things…. We are selling the space,” Schwarz says. “And buyers cannot visualize when there is too much [stuff] in the room.” Decluttering a home’s outdoor spaces is important, too, she says.

Balance hard and soft surfaces. When staging a particular room, it’s essential to have a good balance of hard surfaces, such as a coffee-table top, and soft surfaces, like a carpet, Schwarz says. For example, a room with a cushy, 7-foot-long sofa, a love seat, and four La-Z-Boy recliners has too many soft surfaces and not enough hard surfaces. “The room is sinking,” she says. “It’s all too heavy.” Instead, consider getting rid of the La-Z-Boys and the love seat, replacing them with two wingback chairs. “If you have hardwood floors but no rugs, it’s too hard,” Schwarz says. “So you want to add a rug.”

Work in ones or threes. Schwarz recommends arranging items on top of hard surfaces in ones or threes.

You would place three items—say, a lamp, a plant, and a book—on top of a larger hard surface, like an end table. “You take away the plant and the book, it’s too bare,” she says. “[But if] you put 10 things on it, it’s overdone.” The three items should be closely grouped together in a triangle shape. “I draw a triangle for my clients,” Schwarz says. “I say, ‘Here is the end table—let’s superimpose a triangle on top of it.’ ” For hard surfaces with less area, however, a single item will do.

Decide from the doorway. Since would-be buyers will get their first impression of each room from the doorway, homeowners should use that perspective to judge their staging work. “Do your work, go back to the doorway. Do some more, go back to the doorway,” Schwarz says. That way, you’ll be better able to ensure that each room appeals to buyers.

Make your place Q-Tip clean. A properly staged home should be immaculate—”Q-Tip clean,” as Schwarz puts it. “I mean Q-Tips getting dead flies out of your windowsill [and] going around the bottom of your toilet on the floor,” she says. The purpose of ensuring the house is spotless is more than simply making it presentable. If a home is unkempt, a buyer will wonder what other, less visible problems may come with the property, Schwarz says. “They’ll say, ‘Gosh, if they live like this, what don’t they take care of that I can’t see?'”

Posted under News, Seller

Luxury ‘Street Of Dreams’ Builders Stuck With Pricey Homes

OREGON CITY, Ore. — The street was supposed to be the stuff of dreams.

Along South Grasle Road outside Oregon City, six supersize Street of Dreams homes built in 2007 back up to ribbons of Doug fir and a glazed Mount Hood peak.

The builders came to attract future customers, and they were optimistic about selling the show houses that stretched to $3 million. Normally, two or three homes sell during the show and most are sold within a year.

But nine months after the Street of Dreams show, none has sold.

The show opened just as the U.S. mortgage market tumbled, triggering the Portland region’s biggest home price decline in at least two decades.

One Street of Dreams builder tried unsuccessfully to auction his home. Two builders now own their homes and one of them lives in his. Subcontractors who worked on four homes have filed liens to get paid.

“The timing was probably about the worst ever,” said builder Ray Derby, a Street of Dreams veteran who is still trying to sell his $1.9 million home. “We just hit a bad market.”

The idle homes show what can happen to builders who test the market’s limits of luxury, price and location at what turns out to be the crest of a historic boom. When the market slowed, in this case, the builders got stuck holding homes that turned out to be pricier and tonier than the rural Clackamas County market could support.

Across the Portland area, homes priced over $1 million are selling about as well as less-expensive homes. But the sweet spot for ultraluxury resides in Portland’s West Hills, West Linn or Lake Oswego, not rural Clackamas County.

Through April of this year, eight homes sold across the Portland market for more than $2 million. Six were in the luxury hot spots. Two were in the Clackamas or Oregon City areas, according to the Regional Multiple Listing Service.

The 2007 Street of Dreams’ troubles reminded builders of the 2001 show. That year, the show opened in Hillsboro just as the dot-com economy busted, leading to sluggish sales. Derby said he needed about 18 months to sell his 2001 show home.

With last year’s bad timing and an out-there location, broker Craig Reger, who tried to sell one of the show homes, called the 2007 show’s conditions “a formula for disaster.”

Builder Sean Foushee has built custom homes across the Portland area for 15 years. “This is absolutely the toughest time I’ve ever seen,” said Foushee, owner of Accent Residential Homes in Tualatin.

Foushee, 37 years old with close-cropped red hair, designed his home, named “Salish Moon,” in early 2007 before the market cooled. His “modern lodge style” — think Aspen — was designed more to make a splash than cash.

“You get caught up in it,” Foushee said. “You’re putting a show on.”

For builders like Foushee, the Street of Dreams is a chance to show off in front of thousands of people, some of them potential customers. It’s also a big fundraiser for an industry group, the Home Builders Association of Metropolitan Portland.

Inside the house, Foushee’s voice bounces off the Glacier stone that lines the front room up to the vaulted ceilings. He’s greeted by sales fliers waiting for a potential buyer.

The house, named Best of Show, has all the touches of an exclusive Street of Dreams home.

There’s a smoking room outfitted with thick drapes and a Robb Report magazine — the “Global Luxury Source.” There’s a massage parlor and a shower the size of a small bedroom. Even the walk-in closet has a Mount Hood view. And how many fireplaces?

“I don’t know,” Foushee said. “Seven or something.”

But all this space requires attention.

Without a buyer, upkeep falls on Foushee and his work crews. “It’s not fun,” Foushee said.

Foushee, a golfer, mows the putting green out back. His crews drain the front-yard pond to sweep out algae. Walking next to the wine cellar, Foushee spots dust gathering on the walnut wood floor. “I gotta get guys in here to clean this up,” he said.

The house is still outfitted with $460,000 worth of furniture from the show. “The couch alone,” Foushee says, “was $38,000.”

He wouldn’t say exactly what his loan payment is, but Foushee said builders for homes in that price range typically must cover a $8,000 to $12,000 monthly payment.

Foushee first advertised the house for $3.2 million.

He’s now listing it at $2.9 million, and he just wants to get the house off the books. “I’d take less than that,” Foushee said. “I’ll take a loss, and it’s fine.”

On the way out, he notices the front-room lights are on. He reaches for the touch screen.

“No sense spending any more on the utilities,” he said.

Just as the 2007 show ended and the housing market started to slide, Greg Heinze learned he’d be the lead developer for the following year.

By then, it was clear to anyone that the housing market was headed for trouble.

Heinze, a Street of Dreams veteran, said he and the Home Builders Association of Metropolitan Portland needed enough builders to attract about 80,000 visitors. But he said they had to look hard to find interested builders.

Some builders already had too many homes to sell. Others found that lenders required more upfront cash equity than they could handle.

They talked briefly about canceling the 2008 show, Heinze said. Organizers for the Seattle version of the Street of Dreams canceled this year’s show, but the group’s statement didn’t specify why.

In Portland, Heinze and the builders association decided to go ahead.

They found four other builders to join in the 2008 Street of Dreams show. One house is already built and occupied. All of the other builders except Heinze have homes that are presold, reducing the builders’ risk of getting stuck with the house.

Heinze, though, remains confident. He scans his half-built 6,400-square-foot Street of Dreams home on Mount Scott’s peak above the coursing traffic of Interstate 205. He points to the view and a downtown skyline that shines through the blue-gray sky. Around him, a framing crew hoists a beam into place, a circular saw whirrs and a nail-gun’s compressor growls.

“Right price. Right plan. Right location. You will sell your house,” Heinze said. “The upper-end market is still there. They’re just pickier. … People who’ve got money will always have money.”

Heinze said he did a few things differently to build his house at a lower cost this year. He went with a truss roof built off-site and a steel foundation to reduce construction schedule and interest costs.

During the 2006 housing boom, Heinze said he might have asked $2.25 million.

Now, he’s thinking less than $2 million.

“It’s primarily market driven,” he said. “You’re absolutely insane to go over $3 million. You’re pretty crazy to go over $2 million.”

 By RYAN FRANK, The Oregonian

Posted under News, Seller

US Housing Crash Continues

It’s A Terrible Time To Buy

It’s still much cheaper to rent than to own the same thing. Yearly rents are less than 3% of purchase price. Mortgage rates are 6.5%, so it costs more than twice as much to borrow money to buy a house than it does to rent the same kind of house. Worse, total owner costs including taxes, maintenance, and insurance are about 9%, which is three times the cost of renting. Buying a house is a very bad deal for the buyer.

  1. Salaries cannot cover current house prices. This means house prices must keep falling or salaries must rise much faster. You probably noticed that your salary is not rising much, and that inflation in food, energy, and medical care has been much higher than the government reports. This leaves less money available to pay for housing. A safe mortgage is a maximum of 3 times the buyer’s yearly income, but most mortgages are well beyond that. Anyone who buys now will suffer losses immediately, and for the next several years at least, as prices keep falling.
  2. Prices disconnected from Gross Domestic Product. The value of housing in the US depends a lot on the value of what the US actually produces.
  3. Buyers borrowed too much money and cannot pay the interest. Now there are mass foreclosures, and senators are talking about taking your money to pay for your neighbor’s McMansion, even though no one in the US has been made homeless by foreclosure. In fact, forclosed owners end up far better off: they go reap large savings every month, since it costs less than half as much money in rent as they were paying to “own” the very same thing.Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers) or onto buyers of mortgage-backed bonds. Now that it has become clear that a trillion dollars in mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage-backed bonds. This means that the money available for mortgages is falling, and house prices will keep falling, probably for 5 years or more. This is not just a subprime problem. All mortgages will be harder to get.

    A return to traditional lending standards means a return to traditional prices, which are far below current prices.

  4. Interest rates increases. When rates go from 5% to 7%, that’s a 40% increase in the amount of interest a buyer has to pay. House prices must drop proportionately to compensate. The housing bust still has a very long way to go.For example, if interest rates are 5%, then $1000 per month ($12,000 per year) pays for an interest-only loan of $240,000. If interest rates rise to 7%, then that same $1000 per month pays for an interest-only loan of only $171,428.

    Recent lower Fed inter-bank lending rates do not directly affect mortgages rates, nor do extra Fannie or FHA guarantees. The 30-year fixed mortgage rate actually went up after the Fed’s rate cut, because rate cuts cause higher inflation.

    Also note that unlike the last few years, most lenders now require a 20% downpayment. That will eliminate many buyers from the market, driving down prices.

  5. Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he’s bankrupt in the real world.It’s worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6%. On a $300,000 house, that’s $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.
  6. Shortage of first-time buyers. High house prices have been very unfair to new families, especially those with children. It is literally impossible for them to buy at current prices, yet government leaders never talk about how lower house prices are good for pretty much everyone, instead preferring to sacrifice American families to make sure bankers have plenty of debt to earn interest on. If you own a house and ever want to upgrade, you benefit from falling prices because you’ll save more on your next house than you’ll lose in selling your current house. Every “affordability” program drives prices higher by pushing buyers deeper into debt. To really help Americans, Fannie Mae and Freddie Mac should be completely eliminated, along with the mortgage interest deduction. Canada has no mortgage-interest deduction at all, and has a more affordable housing market because of that.The government keeps prices unaffordable through programs that increase buyer debt, and then pretends to be interested in affordable housing. No one in government except Ron Paul ever talks about the obvious solution: less debt and lower house prices. The real result of every “affordability” program is to keep you in debt for the rest of your life so that you have to keep working. Lower house prices would liberate millions of people from decades of labor each.
  7. Surplus of speculators. Nationally, 25% of houses bought the last few years were pure speculation, not houses to live in, and the speculators are going into foreclosure in large numbers now. Even the National Association of House Builders admits that “Investor-driven price appreciation looms over some housing markets.”
  8. Fraud. It has become common for speculators take out a loan for up to 50% more than the price of the house he intends to buy. The appraiser goes along with the inflated price, or he does not ever get called back to do another appraisal. The speculator then pays the seller his asking price (much less than the loan amount), and uses the extra money to make mortgage payments on the unreasonably large mortgage until he can find a buyer to take the house off his hands for more than he paid. Worked great during the boom. Now it doesn’t work at all, unless the speculator simply skips town with the extra money.
  9. Baby boomers retiring. There are 77 million Americans born between 1946-1964. One-third have zero retirement savings. The oldest are 62. The only money they have is equity in a house, so they must sell.
  10. Huge glut of empty housing. Builders are being forced to drop prices even faster than owners. Builders have huge excess inventory that they cannot sell, and more houses are completed each day, making the housing slump worse.
  11. The best summary explanation, from Business Week: “Today’s housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low interest rates of a weak economy. Either the economy’s long-term prospects will get worse or rates will rise. In either scenario, housing will weaken.”

By Patrick Killelea

Posted under Buyer, News, Seller

Who Disagrees That House Prices Will Continue To Fall?

Real estate related businesses disagree, because they don’t make money if buyers do not buy. These businesses have a large financial interest in misleading the public about the foolishness of buying a house now.

  1. Buyers’ agents get nothing if there is no sale, so they want their clients to buy no matter how bad the deal is, the exact opposite of the buyer’s best interest. Agents take $100 billion each year in commissions from buyers. Agents claim the seller pays the commission, but always fail to mention that the seller gets that money from the buyer. Think about it: who brings the money to the table – the seller or the buyer? All money comes from buyers. No buyer, no money.If a stock broker were to charge 6% on the sale of stock, he would quickly go out of business. Real estate brokers don’t do much more than stock brokers, so why should you give up nearly two years of your working life earning money to pay a realtor for the few hours they may put into helping you buy or sell a house? 6% of the 30 years it takes to pay off a house is 1.8 years of donating your working time to your realtor.There are good buyer’s agents who really believe they are helping the buyer, but they’re in denial about their conflict of interests. Author Upton Sinclair had a great explanation for this: “It is difficult to get a man to understand something when his salary depends on his not understanding it.”
  2. Mortgage brokers take a percentage of the loan, so they want buyers to take out the biggest loan possible. Even worse – mortgage brokers get paid according to how BAD the deal is for the buyer. The worse the deal is (higher interest rate, points, fees, etc) the more the mortgage broker gets!
  3. Banks get origination fees and then sell most mortgages, so they do not care about the bankruptcy of borrowers. They will lend way beyond what buyers can afford because they lose nothing if the buyer defaults. Banks sell most loans to the government agencies Fannie Mae or Freddie Mac. The conversion of low-quality housing debt into “high” quality Fannie Mae debt with the implicit backing of the federal government is the main support for the housing bubble. That is ending as Fannie Mae shrinks.The other way for banks to dump the risk of loan default has been the Wall Street market for mortgage backed securities. Now that mass foreclosures have eliminated the subprime portion of the loan-resale market, banks are under pressure to increase loan quality.
  4. Appraisers are hired by mortgage brokers and banks, so they are going to give the appraisals that mortgage brokers and banks want to see, not the truth. Appraisers that kill a deal by telling the truth do not get called back to do other appraisals.
  5. Newspapers earn money from advertising placed by realtors, lenders, and mortgage brokers, so papers are pressured by that money to publish the real estate industry’s unrealistic forecasts, and to avoid the fatal words: “prices are falling”. Instead, we may sometimes hear about “softening” or “easing” prices, which sounds so pleasant. At worst, you may hear about a “housing slump”, but you will never hear the mainstream press talk about a crash in prices.Worse, realtors have a near-monopoly on sale price information, and newspaper reporters never ask realtors hard questions like “how do we know you’re not lying about those prices?” The result is an endless stream of stories reporting that the National Association of Realtors (NAR) says it’s a good time to buy. Asking the NAR about housing is like walking into a used car dealership and asking the salesman if today would be a good day to buy a car.
  6. Owners themselves do not want to believe they are going to lose huge amounts of money.

By Patrick Killelea

Posted under Buyer, News, Seller

Lowball Offers on the Rise – New York Times

WHAT image does the term “lowballer” conjure up for you? A smirking bottom feeder in a bad suit? A fast-talking investor working the phone?

HOW LOW IS TOO LOW? Carleen Lekelly has her colonial in Basking Ridge, N.J., on the market for $885,000. She has gotten a couple of offers in the low $800,000 range and tells lowballers to look elsewhere.

How about a couple of young newlyweds who have saved their wedding cash to put toward their first home?

James and Valentina Sbarra fit the last description, and they are relieved to be able to call themselves successful lowballers. Any nervousness they felt in making a stingy offer — lowballing is typically defined as offering less than 90 percent of a house’s asking price — fell away the minute they struck a deal on their two-bedroom raised ranch in Pawling, N.Y., in Dutchess County.

“We kind of took a gamble,” said Mr. Sbarra, a bank manager in Mount Kisco, N.Y. “But it worked out for us.”

Throughout the region, buyers of all stripes are feeling similarly empowered to bid low and keep their hopes high. The practice still fails more often than not, in that buyers are unlikely to get themselves a steal. But many sellers are swallowing hard and negotiating, because lowballing has become so common that, for better or worse, it’s part of the new norm in buying or selling a house.

The Sbarras gambled by offering $287,000 for their house, which was listed at a reasonable $329,000. In doing so, they risked angering the owner and ruining their prospects for negotiation.

“I think it’s worth $320, $325, and I gave them my opinion,” said Peter Bell, an owner of Balch Buyer’s Realty in Mamaroneck, N.Y., an agency that represents only buyers. “But they said, ‘We don’t want to go too high.’ So I said, ‘O.K., let me make the offer as strong as I can, and we’ll hope for the best.’ ”

Much to Mr. Bell’s delight, the owner responded with a counteroffer of $315,000, and the parties went back and forth until settling on a price of $300,000, the amount the Sbarras had set as their cutoff. The couple moved in last month.

“We would have been disappointed if it hadn’t worked out,” Mr. Sbarra said. “But it was a situation where we felt buyers had the upper hand.”

Many buyers are willing to go a lot further than the Sbarras did, apparently without concern about rankling owners.

“It’s like the Wild West out there right now,” said Terry Sciubba, the owner and broker at the Sherlock Homes Realty Corporation in Glen Cove, N.Y., on Long Island. “I do have customers where if a house is listed at $600,000, they’ll put in an offer for $350,000. That really, really happens.”

In Westchester, that mind-set plays out right through the home inspection process, which has become “a weapon for the buyers to further negotiate the contract,” said Keith E. Schutzman, a real estate lawyer in Scarsdale, N.Y. “A $500 repair item is now a $5,000 repair item” when it comes to asking the seller to lower the price.

Tami Rapaport, a sales associate in the Tenafly, N.J., office of Coldwell Banker Residential, finds the same thing happening in Bergen County. “People are coming in with offers even 20 percent under,” she said. “People have no shame.”

To be sure, there is an aspect of lowballing that seeks to take advantage of other people’s desperation or misfortune. Some lowball bids are plain outlandish, never mind insulting.

Yet in a difficult real estate market like this one, advocates of the lowball approach say that, practiced respectfully and within the bounds of reason, it can also serve as a necessary reality check on overpriced properties. If some agents are reluctant to push stubborn sellers to lower their prices out of fear of losing the listing, a few disappointingly low offers will communicate the market’s message in the bluntest terms.

James Bednar has been tracking New Jersey lowballers on his blog, New Jersey Real Estate Report (available at since mid-2006. Inspired by his own frustrations as a buyer, Mr. Bednar said he wanted to test the conventional wisdom that lowballing “was a waste of time — that it was futile to even attempt it.”

So, after obtaining a real estate license, which gives him access to multiple listing service data, he began periodically posting lists of sales with gaps of 10 percent or more between the original list price and the selling price.

At first, the conventional wisdom held up — only a tiny percentage of sales reflected accepted lowball offers. But as the market began to slide, the discounts deepened. His last “Lowball!” report, in January, used a 25 percent discount as the starting point, and he still turned up 55 sales in the previous month.

real estate agent now himself, Mr. Bednar sees no shame in making a low offer on a property clearly priced well above the market. While even 5 percent below the asking price might be considered an unfair lowball on a reasonably priced home, on a property priced “horribly high,” he said, “20 percent might be just scratching the surface.”


STRIKING A BARGAIN James and Valentina Sbarra were able to buy their raised ranch in Pawling, N.Y., for $300,000. It was initially priced at $329,000.

Sellers aren’t typically so logical in their assessment of an unexpectedly low offer, of course. Those who perceive a lowball as a slap in the face tend to treat the offending buyers — and sometimes their agents — accordingly.

“I have one seller who doesn’t want to talk to me because I brought him an offer $200,000 below the asking price” of $1.4 million, said Attilio Adamo, the owner and broker at Prudential Adamo Realty, in Ridgefield, N.J. “Some sellers get insulted and hold a grudge.”

Their ire is understandable, said Lois A. Vitt, a financial sociologist and the director of the Institute for Socio-Financial Studies in Middleburg, Va. “Some sellers personify their home, believing the value is all about them, not just about the sticks and bricks,” she said. “They might have lived and loved the home, and a lowball offer can be seen as a very personal insult.”

That is particularly true in high-powered, high-value communities like Scarsdale and Greenwich, Conn., where location and status help prop up prices. Buyers making lowball offers in Greenwich are not getting what they want because sellers refuse to take such offers seriously, said Max Wiesen, a sales associate with Coldwell Banker.

Clients of his recently made a cash offer of $4.6 million for a property listed in the mid-$5-million range. Although it was low, the offer was reasonable, Mr. Wiesen said, given that the house had some issues and no other house on the street had sold at the price these sellers were after. The owners’ response was a counteroffer barely distinguishable from their asking price.

“These people in Greenwich are not in the position other people in America are in,” Mr. Wiesen said. “These are wealthy people who can sit on their houses, and they do.”

But elsewhere, many agents are counseling sellers to consider a lowball offer as a starting point. The gamble for sellers who stall a lowballer in hopes of a higher offer is that, with buyers so cautious and credit so tight, the next offer could be a long time in coming.

Owners who really want or need to sell are accepting lowball offers. Sarah Keenan, a sales associate at Nicholas Fingelly Real Estate in Southport, Conn., recently sold a four-bedroom Cape Cod there for almost 17 percent less than the original list price of $695,000. The house had been on the market since September. “The people that are really motivated to sell are taking it,” Ms. Keenan said.

This is not to say that every lowball offer is worthy of acknowledgment. Low bidders have a better chance of making headway if the house they are after has been languishing on the market or needs a lot of updating, agents say. Even then, the low offer is better off accompanied by a logical explanation, possibly with documentation.

John Herman, president of Buyer’s Representative in Greenwich, a buyers’ agency serving Connecticut, likes to write a letter explaining the thinking behind an offer and presenting some comparable sales prices. “The listing agent often can’t be that direct with their client,” he said. “We can be more direct and still be polite.”

Mr. Bell, the Mamaroneck broker, takes a similar approach with lenders when he attempts to negotiate on foreclosed properties. He was recently awaiting word from a bank about approval of his $143,000 offer on an unfinished lakeside house in Patterson, N.Y., with at least $200,000 in mortgage debt. Mr. Bell hopes to fix up the house for his daughter. If the deal goes through, he said, “I have three or four of her girlfriends waiting for the same thing.”

Though deals can be found if a buyer has enough nerve and stamina to put up with repeated refusals, agents advise that lowballing is a bad idea when the buyer really, really wants the house. “You take your chances when you do it,” said Frank Ledermann, an associate broker in the Scarsdale office of Houlihan Lawrence. “It’s America — you can bid whatever you want. But you may not get what you want.”

You certainly won’t get Carleen Lekelly’s house in Basking Ridge, N.J. Since Ms. Lekelly put the four-bedroom colonial on the market for $885,000 last November, she has received a couple of offers in the low $800,000 range.

Her response has been matter-of-fact: with new bathrooms and granite in the kitchen, her house doesn’t deserve discounting, and more important, she isn’t under any pressure to move. Ms. Lekelly politely suggests that lowballers look elsewhere.

“I truly believe there are certain towns that are going to keep their values,” she said. “There are people that think they can go in anywhere and just lowball — I think it’s kind of silly.”

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